Downsizing can be bad for your health

Organizational downsizing and job loss greatly increase a person’s risk of having to start different medications. Prescriptions for drugs to treat mental health issues are particularly widespread in this group.

“Individuals who are affected by depression are far more likely to start taking medications than others,” says Silje Lill Kaspersen, a researcher at NTNU and SINTEF.

People are almost three times more likely to start taking antidepressants in the month before being let go from a job. Illustration: Colourbox

And, it seems that measures to facilitate more sustained employment for workers with health issues aren’t working well enough. Sick people lose their jobs more often.

Kaspersen is the first author of three studies that deal with the relationship between downsizing, unemployment and health. Three million Norwegian employees are part of the database used a source for the investigations.

Taken together, the three studies have yielded some eye-opening results that have not previously been shown using Norwegian data.

Sudden increase in drug use

Drug use already begins to rise among employees a year before a private business implements staff reductions. This trend applies especially to the time just before and after the downsizing takes place.

Kaspersen notes that individuals are almost three times as likely to start taking antidepressants in the month before being laid off compared to earlier periods in their life when they were employed.

Since medication use increases well before actual job loss, various preventive health initiatives should also be implemented earlier. Photo: Colourbox

This behaviour correlates with the one to three month pink slip notification period before the actual layoff date. The risk of starting medication also increases while the employee is unemployed.

Norwegian workers appear to react to the stress of downsizing and layoffs by seeking medical advice and being prescribed drugs for depression, anxiety, insomnia and cardiovascular conditions.

“We compared employees to themselves over several years, and one uplifting finding in our unemployment and drug use study was that the risk of starting to take medication isn’t that elevated when people go back to work after being unemployed for a while,” Kaspersen said.

Health initiatives need to start early

“Our findings can help inform when it would be helpful to put preventive measures in place in a downsizing process. We should probably think of employee health early on in that process,” says Kaspersen.

Since drug use increases well before actual job loss, various health initiatives should also start beforehand.

“We still don’t know exactly which measures would be the most appropriate,” says Professor Johan Håkon Bjørngaard at NTNU’s Department of Public Health and Nursing. He is a co-author of all the studies.

Many businesses that reduce their workforce cannot afford to prioritize comprehensive health initiatives, such as corporate health services for laid off employees.

“A business manager who has to inform employees about staffing cuts can use our findings to get an idea what reactions to expect from some of the affected employees,” says Kaspersen. She believes that taking action to safeguard employees during this process can be a good idea for businesses.

Then employees will be better prepared at a time when they need to be healthy and able to quickly start seeking new jobs.

“Women and men are affected about equally by staff reductions in the private sector,” says Bjørngaard.

Staff reductions also result in increased use of insulin, thyroid and cardiovascular drugs among affected workers. This may simply be related to the fact that people seek out a doctor when they feel stressed about their work situation, and the doctors then discover other important medical conditions at the same time.

Correlates both ways

“You can ask what comes first: the layoff or the illness. But the studies found a connection both ways,” says Fredrik Carlsen, professor at NTNU’s Department of Economics.

Investigating the cause and effect in both directions strengthens the studies. One of the three studies considered the effect of health on future unemployment.

We don’t seem to have succeeded in providing people with an equal degree of good job opportunities. Illustration: Colourbox

People who already have health problems also eventually become unemployed to a greater degree than healthy workers. Among those who get three or more different diagnoses while they’re still working, the risk of becoming unemployed increases considerably.

For people with anxiety and depression, the risk of being unemployed increased by 57 per cent over a 14-year period.

“We don’t seem to have succeeded in providing people with an equal degree of good job opportunities,” says Carlsen.

This is becoming increasingly important as an ever-growing number of workers reach retirement age and an ever-smaller proportion of the population is part of the workforce.

Implementing multiple different initiatives can increase the opportunities for people to continue working longer or enable those outside the workforce to return. Despite these measures, people who become ill are still at far greater risk of losing their jobs.

This part of the survey tracked 36 000 people who participated in the extensive HUNT2 health survey in Nord-Trøndelag county in the mid-1990s, and linked 14 years of data from Norway’s National Insurance Database to the HUNT questionnaire data.

Three million included

The researchers specifically looked at private companies that downsized their staff by at least 25 per cent in order to obtain detailed information at the individual level. Photo: Colourbox

Two articles that Kaspersen wrote as part of her dissertation were based on data for the entire Norwegian working population in the period 2004 to 2012 of more than three million workers. This material provides more overarching answers.

In order to obtain detailed information at the individual level, the researchers specifically looked at private companies that downsized their staff by at least 25 per cent. This was done to ensure that organizational downsizing, and not reorganization, was the actual reason for laying off employees. In the period 2004 to 2012, more than 144 000 employees and 8 000 businesses fell into this category. Accessing all the data took over two years and required approval from seven government agencies.

Public enterprises are affected to a lesser extent by downsizing, where changes often occur in the form of reorganization instead. We can assume that reorganization may have similar health effects, but this was not investigated this time.

Some medical research data never get published because they don’t fit in with the pharmaceutical industry’s desired results. Profiled researcher and social commentator Ben Goldacre will shed some light on this very topic when he takes part in NTNU’s The Big Challenge science festival in Trondheim in June.

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